Following the recent British Retail Consortium (BRC) report that food inflation has increased to the highest rate (2.5%) since November 2013, analysts at Edge by Ascential have conducted an inflation price comparison of various grocery products between April 2018 and 2019.
Products that use sugar in the manufacturing process, such as carbonated drinks (+6.8%), chocolate (+8.3%) and ice cream (+5.5%), have seen on average a considerable increase in price compared to others, and are projected to increase further in the event of a no-deal Brexit.
Other insight supports existing BRC data. This includes the price of fresh potatoes that have risen 6.3% over the last year, as well as cucumbers by an average 8%. Though these price increases are likely a result of growing conditions and the weather in the countries they are imported from, analysts believe it is also possible that uncertainty around Brexit it also contributing to this.
Chris Elliott, Senior Research Analyst, Edge by Ascential said: “The black cloud of Brexit has a shimmer of a silver lining. Though the Sugar Tax will have played a role in these price increases for products that rely on sugar, the anticipation over trade challenges after a no-deal Brexit, coupled with the introduction of new agricultural policies concerning the production of sugar, could also be huge factors in these rising prices.
“The rise in prices could drive consumers to think twice about purchasing such products, encouraging them to lead a healthier lifestyle.”
NAM Implications:
- Brands/products might benefit more from optimising their low/nil sugar content…
- …rather than the relatively short term Brexit uncertainty…
- As a way forward in these unprecedented times…
